Financial Performance - The company reported a total revenue of RMB 10 billion for the fiscal year 2022, representing a year-over-year increase of 15%[19]. - The EBITDA for the year was RMB 2.5 billion, with an EBITDA margin of 25%[19]. - The company reported a net profit of RMB 1.2 billion for 2022, reflecting a profit margin of 12%[19]. - Total revenue and other income for 2022 was RMB 31,575,693, a decrease of 31.61% from RMB 46,171,470 in 2021[40]. - Profit before tax for 2022 was RMB 3,049,963, down 72.47% from RMB 11,079,122 in 2021[40]. - Net profit attributable to shareholders for 2022 was RMB 2,789,068, a decrease of 70.32% from RMB 9,398,369 in 2021[40]. - Basic earnings per share for 2022 was RMB 0.11, down 71.05% from RMB 0.38 in 2021[40]. - The weighted average return on net assets for 2022 was 2.93%, a decrease of 7.33 percentage points from 10.26% in 2021[40]. - The company achieved total revenue and other income of RMB 31,576 million, a year-on-year decrease of 31.61%[73]. - The pre-tax profit was RMB 3,050 million, down 72.47% year-on-year, while the net profit attributable to shareholders was RMB 2,789 million, a decline of 70.32%[73]. Business Strategy and Development - The company maintained a strong focus on digital transformation, enhancing its proprietary app functionalities and accelerating enterprise-level architecture development[3]. - The company aims to enhance its service capabilities and governance to align with the comprehensive registration system reform, focusing on customer-centric comprehensive financial services[7]. - The company acknowledges the need for market-oriented reforms and aims to achieve breakthroughs in business collaboration mechanisms and agile organizational structures[7]. - The company is committed to enhancing its comprehensive service capabilities and optimizing its business layout to support national strategies and stabilize the economy[52]. - The company aims to improve its comprehensive financial service capabilities, integrating investment and securities business for better profitability and stability[104]. - The company plans to enhance its investment and investment banking service system, focusing on national strategic services and industry chain investment opportunities in 2023[104]. Market Position and Recognition - The company achieved a top ranking in the securities industry's investment banking quality evaluation and was recognized for outstanding contributions in securities research[3]. - The company’s bond investment advisory business ranked among the top five in the industry, showcasing its competitive position[3]. - The company received multiple awards, including recognition as one of China's top 100 listed companies and for its ESG practices[59]. - The company was recognized as a leading asset management institution, winning the "Best Public REITs Investment Institution" award[62]. - The company was awarded the "Best Bond Underwriter" and "Best Corporate Bond Project" in 2022, highlighting its strong position in the bond underwriting market[62]. ESG and Social Responsibility - The company emphasized the importance of ESG management, actively addressing green development and sustainable finance issues[2]. - In 2022, the company invested CNY 54.96 million in public welfare initiatives, reinforcing its commitment to poverty alleviation programs[2]. - The company is committed to improving its ESG initiatives, with plans to invest RMB 200 million in sustainable practices over the next five years[19]. - The company has been acknowledged for its contributions to sustainable development, receiving the "Sustainable Development Inclusive Finance Award" in 2022[62]. Operational Efficiency and Technology - The company has allocated RMB 500 million for research and development in new technologies, aiming to enhance service efficiency and customer experience[19]. - The company is focusing on digital transformation, with increased investment in financial technology to enhance operational efficiency and risk management capabilities[50]. - The company aims to enhance its professional service capabilities and financial technology application in 2023, focusing on the iteration of the "Securities Lending" platform[117]. - The company launched a non-face-to-face account opening system for Hong Kong, Macau, and Taiwan clients, achieving a non-face-to-face account opening rate of 95.5%[110]. Financial Services and Products - The main business segments include corporate finance, personal finance, institutional services, and investment management, with no significant changes in the business model during the reporting period[58]. - Corporate finance services encompass investment banking and principal investment, providing services such as equity underwriting and financial advisory[55]. - Personal finance services cover a wide range of needs for individual and non-professional institutional investors, including securities brokerage and margin financing[58]. - The investment management segment achieved total revenue of RMB 1,816 million, a decrease of 19.56% compared to the previous year[76]. Future Outlook - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share over the next three years[19]. - The company has set a performance guidance of 10-15% revenue growth for 2023, driven by new product offerings and market expansion[19]. - The company aims to strengthen its research and investment system and improve active management capabilities in 2023[153]. - The company plans to enhance its core competitiveness in derivatives trading and product innovation in 2023, aiming to expand cross-border business scale and profitability[146].

Financial Performance - The company's operating revenue for Q3 2022 was approximately RMB 5.24 billion, a decrease of 40.56% compared to the same period last year[3]. - Net profit attributable to shareholders for Q3 2022 was approximately RMB 917.24 million, down 68.25% year-on-year[3]. - The basic earnings per share for Q3 2022 was RMB 0.04, a decline of 66.67% compared to the previous year[3]. - The company's net profit for the year-to-date period was approximately RMB 4.28 billion, a decrease of 42.25% compared to the same period last year[3]. - The company's total revenue for the first nine months of 2022 was RMB 18,056,766,355.39, a decrease of 27.4% compared to RMB 24,891,090,025.69 in the same period of 2021[15]. - Net profit for the first nine months of 2022 was RMB 4,540,381,571.55, down 39.4% from RMB 7,469,757,097.03 in the previous year[15]. - The net income attributable to shareholders of the parent company was RMB 4,279,033,307.09, a decline of 42.8% compared to RMB 7,409,477,706.79 in 2021[33]. - Total comprehensive income for the period was RMB 4,522,524,565.96, a decrease of 38.5% compared to RMB 7,343,615,923.18 in the same period last year[16]. - Basic and diluted earnings per share were both RMB 0.17, down from RMB 0.30 in the same period last year[16]. Assets and Liabilities - Total assets as of September 30, 2022, amounted to approximately RMB 617.17 billion, an increase of 2.69% from the end of the previous year[3]. - The total assets as of September 30, 2022, were RMB 617,169,198,166.51, an increase from RMB 601,011,467,253.09 at the end of 2021[14]. - The total liabilities increased to RMB 498,511,103,281.62 from RMB 493,956,873,232.83, indicating a rise in financial obligations[14]. - The company's total equity attributable to shareholders increased by 1.78% to approximately RMB 96.91 billion compared to the end of the previous year[3]. - The company's total equity increased to RMB 118,658,094,884.89 from RMB 107,054,594,020.26, indicating growth in shareholder value[14]. Cash Flow - The company reported a net cash flow from operating activities of approximately RMB 3.51 billion, which is not applicable for year-on-year comparison[3]. - Net cash flow from operating activities was RMB 3,509,871,164.84, a significant improvement from a negative cash flow of RMB -37,210,515,364.41 in the previous year[17]. - The company reported a net increase in cash and cash equivalents of RMB 10,129,659,790.25, compared to RMB 20,247,292,430.28 in the same period last year[18]. - The company's cash and cash equivalents rose to RMB 120,746,856,344.58 from RMB 108,580,453,632.49, showing improved liquidity[14]. - The company's total cash and cash equivalents at the end of the period were RMB 156,191,093,006.00, compared to RMB 143,446,270,538.71 at the end of the same period last year[18]. Shareholder Information - The total number of common shareholders at the end of the reporting period is 293,567, with 64 H-share shareholders included[9]. - The top shareholder, China Jianyin Investment Limited, holds 26.34% of shares, totaling 6,596,306,947 shares[10]. - The second-largest shareholder, Central Huijin Investment Ltd., owns 20.05% of shares, amounting to 5,020,606,527 shares[10]. - The third-largest shareholder, Hong Kong Central Clearing Limited, possesses 10.00% of shares, which equals 2,503,796,170 shares[10]. - Central Huijin Investment holds 100% of China Jianyin Investment, indicating a significant ownership structure[11]. Changes in Management - The board of directors has undergone changes, with Liu Jian appointed as the executive director and chairman on August 26, 2022[12]. - Liu Jian was appointed as the executive director and chairman of the fifth board of directors on August 26, 2022, following the resignation of Chu Xiaoming[30]. - The company has undergone changes in its authorized representative, with Liu Jian taking over the role on August 26, 2022, after Chu Xiaoming's resignation[31]. Investment and Income - The company experienced a significant increase in derivative financial assets, rising by 278.48% to approximately RMB 10.60 billion compared to the end of 2021[8]. - The company's interest income for the year-to-date period decreased by 89.41% to approximately RMB 113.97 million compared to the same period last year[8]. - The net income from brokerage business fees decreased to RMB 4,067,391,464.26 from RMB 4,810,826,534.35, indicating a decline in brokerage activities[15]. - Investment income dropped significantly to RMB 1,456,680,339.72 from RMB 8,397,668,502.54, reflecting challenges in investment performance[15]. - The net interest income decreased to RMB 113,971,772.55 from RMB 1,076,306,615.21, reflecting a significant decline[15].

Financial Performance - Total revenue and other income for the first half of 2022 was RMB 18,536,642, a decrease of 12.89% compared to RMB 21,280,128 in the same period of 2021[17]. - Profit before tax for the first half of 2022 was RMB 4,088,916, down 23.53% from RMB 5,347,139 in the first half of 2021[17]. - Net profit attributable to shareholders for the first half of 2022 was RMB 3,361,796, a decline of 25.64% compared to RMB 4,520,910 in the same period of 2021[17]. - Basic earnings per share for the first half of 2022 was RMB 0.13, down 27.78% from RMB 0.18 in the first half of 2021[17]. - Total revenue and other income for the first half of 2022 was RMB 18,537 million, a year-on-year decrease of 12.89%[42]. - The pre-tax profit was RMB 4,089 million, down 23.53% year-on-year, while the net profit attributable to shareholders was RMB 3,362 million, a decline of 25.64%[42]. - The basic earnings per share were RMB 0.13, representing a year-on-year decrease of 27.78%[42]. - The weighted average return on equity for the first half of 2022 was 3.47%, down 1.54 percentage points from 5.01% in the first half of 2021[17]. Assets and Liabilities - Total assets as of June 30, 2022, were RMB 624,957,963, an increase of 3.98% from RMB 601,011,467 at the end of 2021[18]. - Total liabilities as of June 30, 2022, were RMB 516,988,313, up 4.66% from RMB 493,956,873 at the end of 2021[18]. - Total equity attributable to shareholders was RMB 95,933,101 as of June 30, 2022, a slight increase of 0.75% from RMB 95,222,008 at the end of 2021[18]. - The debt-to-asset ratio increased to 78.75% as of June 30, 2022, compared to 78.43% at the end of 2021, reflecting a rise of 0.32 percentage points[18]. - Cash and cash equivalents as of June 30, 2022, were RMB 74,863 million, an increase of 55.82% compared to RMB 48,046 million as of June 30, 2021[83]. - The company's total liabilities amounted to RMB 516,988 million, reflecting a growth of 4.66% compared to the previous year[87]. - The accounts receivable increased significantly to RMB 7,900,779 thousand, up 93% from the previous year[85]. - The company's total assets reached RMB 624,958 million, representing a 3.98% increase from the previous year[85]. Risk Management - The company emphasizes the importance of understanding various market risks, including market risk, credit risk, liquidity risk, operational risk, policy risk, legal compliance risk, innovation business risk, and exchange rate risk[2]. - The company has established a comprehensive risk management system and liquidity risk management mechanism to enhance the efficiency of its capital usage[92]. - The company is actively exploring new financing models and channels to improve debt financing management capabilities[120]. - The company is conducting regular liquidity risk stress tests to prepare for potential liquidity shocks from market changes[120]. - The company is strengthening its risk management processes by conducting feasibility analyses for major investment projects[116]. - The company is closely monitoring macroeconomic policies and regulatory changes to adjust its risk control policies and business strategies accordingly[122]. Corporate Governance - The company’s board of directors consists of 11 members, including 5 independent non-executive directors, ensuring a diverse governance structure[130]. - The company has not experienced any changes in its directors, supervisors, or senior management during the reporting period, indicating stability in leadership[131]. - The company continues to focus on expanding its market presence and enhancing its corporate governance practices[135]. - The company has made adjustments to its board committees, including the strategic committee and the remuneration and nomination committee, to enhance governance[133]. - The company adheres to corporate governance standards and has established a comprehensive internal control system to ensure regulatory compliance[127]. Market and Business Strategy - The company plans to expand its market presence and develop new products and technologies, although specific details were not disclosed in the report[2]. - The company aims to enhance its core competitiveness and improve its compliance and risk control systems in the upcoming reporting period[126]. - The company is focusing on optimizing the structure of high-quality liquid assets to meet business funding needs and debt repayment[120]. - The company is actively managing foreign exchange risks through analysis and hedging strategies, maintaining a low net foreign currency exposure[125]. - The company aims to enhance its financial technology capabilities and upgrade existing systems to improve operational efficiency[76]. Employee and Social Responsibility - The company has implemented a salary system that combines security and incentives, linking employee compensation directly to performance evaluations[142]. - The company has focused on training programs to enhance employees' business capabilities in line with its development strategy, particularly in wealth management and investment banking[143]. - The company plans to invest RMB 34.5 million in poverty alleviation efforts in Gansu Province, with RMB 15.29 million allocated to consolidate poverty alleviation results and RMB 19.21 million for rural revitalization[147]. - The company has processed 980 cases under the "anti-poverty comprehensive insurance" program, with total payouts nearing RMB 2.39 million, effectively preventing poverty recurrence[147]. - The company has established 27 new village-level bases to enhance grassroots governance capabilities and support rural revitalization efforts[148]. Legal and Compliance - The company is involved in multiple legal disputes regarding pledged securities repurchase agreements, with claims totaling RMB 83 million, RMB 100 million, and RMB 90 million respectively against individuals who defaulted on interest payments and repurchase transactions[164][165][166]. - The company has successfully obtained court rulings in its favor in multiple cases, indicating a strong legal position in its disputes[162][163]. - There are no criminal investigations or administrative penalties against the company or its senior management during the reporting period, ensuring compliance with regulatory standards[167]. - The company has maintained a good credit standing, with no significant debts or court judgments pending against it or its controlling shareholders[167]. Awards and Recognition - The company received multiple awards, including the 2021 Shanghai Economic Financial Research Mechanism Advanced Collective Award from the People's Bank of China[32]. - The company was recognized as a top performer in various categories, including best A-share underwriter and best refinancing underwriter by WIND in 2021[34]. - The company has been awarded for its contributions to the development of the financial industry in Xinjiang, supporting high-quality economic growth[32]. Environmental Initiatives - The company established a "Carbon Neutral" bond business team to support green enterprises' bond financing and has successfully issued multiple innovative carbon-neutral bonds[145]. - The company has implemented various green operational measures, including energy-saving lighting and promoting paperless offices, to reduce carbon emissions[146]. - The company has committed to strict adherence to environmental laws and regulations, actively promoting low-carbon services and climate change management[146].

Dividend Distribution - The company plans to distribute a cash dividend of RMB 1.00 per 10 shares, totaling RMB 2,503,994,456.00, based on a total share capital of 25,039,944,560 shares as of December 31, 2021[2]. - The company reported that the undistributed profits after the dividend distribution will be RMB 438,572,989.61, which will be carried forward to the next year[2]. - The company will adjust the per-share distribution ratio if there are changes in total share capital before the dividend distribution date[2]. Financial Performance - Total revenue and other income for 2021 reached RMB 46,171,470 thousand, an increase of 17.92% compared to RMB 39,156,373 thousand in 2020[29]. - Profit before tax for 2021 was RMB 11,079,122 thousand, reflecting an 18.51% increase from RMB 9,348,467 thousand in 2020[29]. - Net profit attributable to shareholders for 2021 was RMB 9,398,369 thousand, up 21.02% from RMB 7,766,175 thousand in 2020[29]. - Basic earnings per share for 2021 were RMB 0.38, an increase of 22.58% from RMB 0.31 in 2020[29]. - The weighted average return on equity for 2021 was 10.26%, up from 9.05% in 2020[29]. Audit and Compliance - The annual financial report for 2021 has been audited by PwC and received a standard unqualified opinion[2]. - The financial report is prepared in accordance with International Financial Reporting Standards, ensuring compliance and transparency[2]. - The board of directors and senior management have guaranteed the truthfulness, accuracy, and completeness of the annual report[2]. Risk Management - The company emphasizes the importance of understanding potential market risks, credit risks, liquidity risks, operational risks, policy risks, legal compliance risks, and product/business innovation risks[2]. - The company has established a comprehensive risk management system to effectively prevent liquidity risks[142]. - The company is facing challenges from market risks due to global economic uncertainties and is implementing measures to enhance risk management[162]. Business Operations - The company operates through its subsidiaries, including Shenwan Hongyuan Securities, Shenwan Hongyuan West, and Shenwan Hongyuan Underwriting and Sponsorship[15]. - The company maintains its main business scope, which includes investment management, equity investment, and investment consulting, since its listing[15]. - The company is involved in securities business, securities investment consulting, and securities investment fund sales services[16]. Capital Structure - The registered capital of Shenwan Hongyuan Group Co., Ltd. is RMB 25,039,944,560[10]. - The company has not disclosed any significant changes in share capital during the reporting period[3]. - Central Huijin holds a 55.38% stake in Shenwan Hongyuan after acquiring 1.22 billion shares in 2012[22]. Market Position - The company maintains a leading position in the industry, with strong asset quality and financial health, ranking among the top tier in operating income, net profit, and return on net assets[44]. - The wealth management market in China has surpassed RMB 200 trillion, making it the second-largest wealth management market globally, driven by a shift from savings to investment among residents[42]. Awards and Recognition - The company has received multiple awards, including the A-class underwriter credit rating for corporate bonds from the National Development and Reform Commission[53]. - The company was recognized as an outstanding underwriter for corporate bonds by the Shanghai Stock Exchange[54]. - The company achieved significant recognition in the New Fortune 2021 Investment Banking Rankings, including Best M&A Investment Bank and Best Domestic Investment Bank[56]. Shareholder Engagement - The company held 3 shareholder meetings, 11 board meetings, and 8 supervisory board meetings during the reporting period[185]. - The participation rate for the 2020 Annual General Meeting was 62.54%[188]. - The 2021 First Extraordinary General Meeting had a participation rate of 62.17%[190]. Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code and has not faced any penalties or public reprimands during the reporting period[179]. - The company has established a clear governance structure with defined responsibilities among the shareholders' meeting, board of directors, supervisory board, and management[185]. - The company ensures the protection of minority shareholders' rights and has not infringed upon their interests[185].

[Section 1. Important Notice, Table of Contents, and Definitions](index=1&type=section&id=Section%201.%20Important%20Notice,%20Table%20of%20Contents,%20and%20Definitions) This section provides essential notices, the report's table of contents, and definitions of key terms [Section 2. Company Profile and Key Financial Indicators](index=9&type=section&id=Section%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section introduces the company's background and presents its key financial performance and position metrics [Company Profile](index=9&type=section&id=Company%20Profile) Shenwan Hongyuan Group Co., Ltd. is an A+H share listed company with main offices in Beijing and Hong Kong, and Mr. Huang Hao as its legal representative - The company is an A+H share listed company, with stock codes **000166** (SZSE) and **6806** (HKEX) respectively[9](index=9&type=chunk) [Key Accounting Data and Financial Indicators](index=12&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the company achieved significant year-on-year growth in total revenue and profit attributable to equity holders, with total assets also increasing, and no material differences in financial results under domestic and international accounting standards Key Financial Indicators for H1 2021 (IFRS) | Indicator | H1 2021 | H1 2020 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue and Other Income (Thousand RMB) | 21,280,128 | 17,790,098 | 19.62% | | Profit Before Tax (Thousand RMB) | 5,347,139 | 4,955,930 | 7.89% | | Profit Attributable to Equity Holders of the Company (Thousand RMB) | 4,520,910 | 4,034,768 | 12.05% | | Basic Earnings Per Share (RMB/Share) | 0.18 | 0.16 | 12.50% | | Weighted Average Return on Net Assets (%) | 5.01 | 4.75 | Increase of 0.26 percentage points | Key Balance Sheet Indicators as of June 30, 2021 (IFRS) | Indicator | June 30, 2021 | December 31, 2020 | Change from Prior Year-End (%) | | :--- | :--- | :--- | :--- | | Total Assets (Thousand RMB) | 520,597,662 | 491,124,277 | 6.00% | | Total Liabilities (Thousand RMB) | 426,634,352 | 401,033,687 | 6.38% | | Total Equity Attributable to Equity Holders of the Company (Thousand RMB) | 92,269,280 | 88,464,617 | 4.30% | - There is no material difference in net profit and total equity attributable to equity holders of the company between financial reports prepared under IFRS and China Accounting Standards for Business Enterprises[17](index=17&type=chunk) [Net Capital and Related Risk Control Indicators](index=13&type=section&id=Net%20Capital%20and%20Related%20Risk%20Control%20Indicators) Shenwan Hongyuan Securities' parent company net capital increased by **9.43%** to **RMB 72.28 billion**, with all risk control indicators meeting regulatory requirements despite slight decreases in liquidity coverage and net stable funding ratios Shenwan Hongyuan Securities Parent Company Key Risk Control Indicators | Indicator | End of Current Reporting Period | End of Prior Year | Change | | :--- | :--- | :--- | :--- | | Net Capital (Thousand RMB) | 72,283,843 | 66,054,127 | 9.43% | | Risk Coverage Ratio | 186.70% | 163.70% | Increase of 23.00 percentage points | | Capital Leverage Ratio | 15.74% | 16.06% | Decrease of 0.32 percentage points | | Liquidity Coverage Ratio | 203.82% | 205.07% | Decrease of 1.25 percentage points | | Net Stable Funding Ratio | 123.73% | 133.71% | Decrease of 9.98 percentage points | [Section 3. Management Discussion and Analysis](index=14&type=section&id=Section%203.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational performance, financial condition, and future outlook [Overview of Principal Businesses](index=14&type=section&id=Principal%20Businesses%20Engaged%20by%20the%20Company%20During%20the%20Reporting%20Period) The company operates as an investment holding group primarily focused on securities business, structured into four main segments: Corporate Finance, Personal Finance, Institutional Services and Trading, and Investment Management - The company's business structure is divided into four major segments: - **Corporate Finance**: Includes investment banking and principal investment businesses - **Personal Finance**: Provides brokerage, margin financing, and securities lending services to individual and non-professional institutional investors - **Institutional Services and Trading**: Offers prime brokerage, research and consulting, and proprietary trading services - **Investment Management**: Encompasses asset management, public fund management, and private fund management[20](index=20&type=chunk)[21](index=21&type=chunk) [Analysis of Core Competencies](index=15&type=section&id=Analysis%20of%20Core%20Competencies) The company's core strengths include leading comprehensive capabilities, a broad business scope, strategic regional presence, effective risk management, and a robust talent system, all contributing to its industry leadership - The company's core competencies include: - **Leading Comprehensive Strength**: Strong shareholder advantages and robust capital strength position it among the industry leaders in comprehensive competitiveness - **Comprehensive Business Layout**: Possesses a full range of licenses and a complete securities business product line, actively expanding its investment footprint - **Favorable Regional Advantages**: Strategic forward-looking布局 in traditional advantageous regions like Shanghai and Xinjiang, as well as key strategic areas such as the Guangdong-Hong Kong-Macao Greater Bay Area and Beijing-Tianjin-Hebei region - **Effective Risk Management**: Established a group-wide risk management system, with all risk control indicators meeting regulatory requirements - **Robust Talent Mechanism**: Centered on market-oriented mechanisms to promote shared interests among the company, shareholders, and employees[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [Analysis of Principal Businesses](index=16&type=section&id=Analysis%20of%20Principal%20Businesses) In H1 2021, the company achieved strong overall operating performance with revenue and net profit growth exceeding industry averages, primarily driven by institutional services and trading, while investment management revenue declined Operating Performance by Business Segment for H1 2021 (Unit: Thousand RMB) | Business Segment | Total Revenue and Other Income | Total Expenses | YoY Change in Total Revenue (%) | YoY Change in Total Expenses (%) | | :--- | :--- | :--- | :--- | :--- | | Corporate Finance | 1,500,418 | 1,160,004 | 16.43% | 24.66% | | Personal Finance | 6,402,444 | 4,357,245 | 6.57% | 8.44% | | Institutional Services and Trading | 12,482,678 | 10,106,586 | 31.65% | 36.42% | | Investment Management | 894,588 | 708,121 | -11.57% | 5.64% | | **Total** | **21,280,128** | **16,331,956** | **19.62%** | **25.37%** | [Corporate Finance Business](index=17&type=section&id=Corporate%20Finance%20Business) The Corporate Finance segment generated **RMB 1.5 billion** in total revenue, a **16.43%** year-on-year increase, driven by strong growth in investment banking, while principal investment business revenue declined - Investment banking seized market opportunities, completing **14** equity financing projects domestically with a financing amount of **RMB 16.24 billion**, and leading underwriting of corporate bonds totaling **RMB 78.23 billion**, ranking **7th** in the industry[37](index=37&type=chunk) - Principal investment business steadily expanded, with Hongyuan Huizhi adding **RMB 720 million** in private, small, and medium-sized enterprise investments and financing, and Shenwan Direct Investment having **4** portfolio companies successfully listed[38](index=38&type=chunk) [Personal Finance Business](index=19&type=section&id=Personal%20Finance%20Business) The Personal Finance segment achieved **RMB 6.40 billion** in total revenue, a **6.57%** year-on-year increase, benefiting from robust securities brokerage and strong financial product sales, while stock pledge business was actively compressed - Securities brokerage business: Net income from agency trading business was **RMB 1.895 billion**, client assets under custody reached **RMB 4.31 trillion**, with a market share of **6.41%**[40](index=40&type=chunk) - Futures brokerage business: Shenwan Futures' average daily client equity increased by **38.66%** year-on-year, and Hongyuan Futures' average daily client equity increased by **73.16%** year-on-year[41](index=41&type=chunk)[42](index=42&type=chunk) - Margin financing and securities lending business: Year-end scale was **RMB 80.68 billion**, a slight decrease of **0.20%** from the prior year-end, with a market share of **4.52%**[43](index=43&type=chunk) - Stock pledge financing business: Financing balance was **RMB 8.18 billion**, a **28.85%** decrease from the prior year-end, reflecting active risk control[44](index=44&type=chunk) - Financial product sales: Sales of self-developed products reached **RMB 101.14 billion**, a **173.78%** year-on-year increase; agency sales of third-party products reached **RMB 51.54 billion**, a **34.71%** year-on-year increase[45](index=45&type=chunk) [Institutional Services and Trading Business](index=22&type=section&id=Institutional%20Services%20and%20Trading%20Business) The Institutional Services and Trading segment performed strongly, achieving **RMB 12.48 billion** in total revenue, a **31.65%** year-on-year increase, driven by prime brokerage, FICC, and equity sales and trading, with significant growth in derivatives and cross-border businesses - Prime brokerage business: Trading unit seat commission income was **RMB 405 million**, a **31.90%** year-on-year increase; PB system total scale was approximately **RMB 248.97 billion**[47](index=47&type=chunk)[48](index=48&type=chunk) - FICC sales and trading business: Bond business investment return rate surpassed market indices, and the company obtained market maker qualification for interbank bond spot trading[50](index=50&type=chunk)[51](index=51&type=chunk) - Derivatives business: OTC options business scale ranked among the top in the industry, and cross-border business scale increased by over **300%** from the prior year-end[53](index=53&type=chunk) [Investment Management Business](index=25&type=section&id=Investment%20Management%20Business) The Investment Management segment generated **RMB 895 million** in total revenue, an **11.57%** year-on-year decrease, with asset management scale reaching **RMB 319.20 billion** and significant growth in public fund management through its associate, Fullgoal Fund - Asset management business: As of the end of the reporting period, business scale was **RMB 319.20 billion**, ranking **9th** in the industry[56](index=56&type=chunk) - Public fund management business: Fund investment advisory services reached **81,000** clients, with an AUM of nearly **RMB 2.9 billion**; associate Fullgoal Fund's AUM reached **RMB 790.7 billion**, a **34.49%** increase from the beginning of the year[57](index=57&type=chunk) [Financial Statement Analysis](index=27&type=section&id=Financial%20Statement%20Analysis) The company maintained a stable financial position during the reporting period, with total assets and liabilities increasing, driven by growth in fee and commission income, net investment income, and other income, while operating cash flow was a net outflow due to increased financial instrument investments [Analysis of Consolidated Statement of Profit or Loss](index=27&type=section&id=Analysis%20of%20Consolidated%20Statement%20of%20Profit%20or%20Loss) In H1 2021, the Group's total revenue and other income increased by **19.62%**, primarily driven by fee and commission income, net investment income, and other income, while total expenses rose by **25.37%** due to higher commodity sales costs, interest expenses, and staff costs Revenue Composition for H1 2021 (Unit: Thousand RMB) | Item | H1 2021 | H1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Fee and Commission Income | 5,134,700 | 4,273,827 | 20.14 | | Interest Income | 5,579,696 | 5,666,902 | -1.54 | | Net Investment Income | 4,635,058 | 3,289,342 | 40.91 | | Other Income and Gains | 5,930,674 | 4,560,027 | 30.06 | | **Total Revenue and Other Income** | **21,280,128** | **17,790,098** | **19.62** | Expense Composition for H1 2021 (Unit: Thousand RMB) | Item | H1 2021 | H1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Interest Expense | 4,632,538 | 3,799,738 | 21.92 | | Staff Costs | 3,499,091 | 3,031,318 | 15.43 | | Other Operating Expenses | 6,627,393 | 4,789,057 | 38.39 | | **Total Expenses** | **16,331,956** | **13,027,158** | **25.37** | [Analysis of Consolidated Statement of Cash Flows](index=29&type=section&id=Analysis%20of%20Consolidated%20Statement%20of%20Cash%20Flows) As of June 30, 2021, the Group's cash and cash equivalents increased by **51.59%** to **RMB 48.05 billion**, with a net cash inflow of **RMB 10.51 billion** during the period, driven by net cash inflow from investing activities offsetting net outflow from operating activities - Net cash outflow from operating activities was **RMB 26.94 billion**, an increase of **RMB 19.32 billion** in outflow year-on-year, primarily due to increased cash outflow from the purchase of financial instruments at fair value through profit or loss[62](index=62&type=chunk) - Net cash inflow from investing activities was **RMB 34.97 billion**, compared to a net outflow of **RMB 15.73 billion** in the prior period, mainly due to increased cash inflow from the disposal of financial assets at fair value through other comprehensive income[62](index=62&type=chunk) [Analysis of Consolidated Statement of Financial Position](index=30&type=section&id=Analysis%20of%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2021, the Group's total assets reached **RMB 520.6 billion**, a **6.00%** increase from the beginning of the year, primarily driven by an increase in financial assets at fair value through profit or loss, with a balanced debt structure and controllable liquidity risk - The main reason for the increase in current assets was a **RMB 48.41 billion** increase in 'financial assets at fair value through profit or loss' from the beginning of the year[67](index=67&type=chunk) - The main reason for the increase in current liabilities was a **RMB 28.91 billion** increase in 'long-term bonds due within one year' from the beginning of the year[67](index=67&type=chunk) - The company's financing channels include interbank borrowing, income certificates, and corporate bonds; as of the end of the reporting period, liabilities due in over one year accounted for **46.93%**, and those due within one year accounted for **53.07%**, with no overdue debts[68](index=68&type=chunk)[70](index=70&type=chunk) [Analysis of Investment Status](index=36&type=section&id=Analysis%20of%20Investment%20Status) During the reporting period, the company's equity in associates and joint ventures decreased by **11.45%** to **RMB 4.17 billion**, with no new significant equity or non-equity investments, and its securities portfolio primarily consisting of asset management plans, bonds, and stocks - Equity investments in associates and joint ventures amounted to **RMB 4.17 billion**, a **11.45%** decrease from **RMB 4.71 billion** in the prior year[76](index=76&type=chunk) - The top ten securities investments at period-end included Rongyu Fund Shenwan Hongyuan Securities No. 1 Collective Asset Management Plan, **CATL**, **Hikvision**, and **Kweichow Moutai**[78](index=78&type=chunk) [Analysis of Major Subsidiaries and Associates](index=38&type=section&id=Analysis%20of%20Major%20Subsidiaries%20and%20Associates) The company holds several wholly-owned and controlled subsidiaries, with Shenwan Hongyuan Securities Co., Ltd. being a core contributor with **RMB 4.45 billion** in net profit for H1, and associate Fullgoal Fund Management Co., Ltd. also performing strongly with **RMB 1.24 billion** in net profit Operating Performance of Major Subsidiaries for H1 2021 (Unit: Thousand RMB) | Company Name | Type | Total Assets | Net Assets | Net Profit | | :--- | :--- | :--- | :--- | :--- | | Shenwan Hongyuan Securities Co., Ltd. | Wholly-owned Subsidiary | 479,955,774 | 92,444,987 | 4,451,834 | | Hongyuan Huizhi Investment Co., Ltd. | Wholly-owned Subsidiary | 6,346,205 | 2,191,605 | 77,440 | | Hongyuan Futures Co., Ltd. | Wholly-owned Subsidiary | 14,728,525 | 1,441,377 | 85,217 | | Shenwan Futures Co., Ltd. | Controlled Subsidiary | 26,903,064 | 3,628,510 | 137,256 | Operating Performance of Major Associates for H1 2021 (Unit: Thousand RMB) | Company Name | Type | Total Assets | Net Assets | Net Profit | | :--- | :--- | :--- | :--- | :--- | | Fullgoal Fund Management Co., Ltd. | Associate | 9,590,773 | 5,732,272 | 1,241,936 | [Use of H-share Proceeds](index=41&type=section&id=Use%20of%20H-share%20Proceeds) The net proceeds from the 2019 H-share issuance were allocated as planned, with approximately **50%** for securities business, **30%** for principal investments, and **20%** for international business, and all funds were fully utilized by the end of the reporting period - H-share proceeds allocation: approximately **50%** for securities business development, **30%** for principal investments, and **20%** for international business development[86](index=86&type=chunk) - During the reporting period, **RMB 1.5 billion** of the proceeds was injected into Shenwan Hongyuan Securities to support the international group's business development[86](index=86&type=chunk) - As of June 30, 2021, all proceeds have been fully utilized, with no unutilized amounts[90](index=90&type=chunk) [Risk Analysis and Response](index=43&type=section&id=Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces market, credit, liquidity, operational, policy, legal compliance, innovation, and exchange rate risks, and has established a comprehensive group-wide risk management system with specific countermeasures for each risk type - **Market Risk**: Primarily arises from proprietary trading and other businesses; the company manages this through a 'risk appetite-tolerance-limit' system, VaR, and stress testing, with Shenwan Hongyuan Securities' proprietary investment business VaR (1-day, 95%) at **RMB 140 million** at period-end[92](index=92&type=chunk) - **Credit Risk**: Primarily stems from financing businesses and fixed-income proprietary trading; the company addresses this by compressing stock pledge business scale (a **28.85%** decrease in H1), establishing an internal rating system, and strengthening due diligence[94](index=94&type=chunk) - **Liquidity Risk**: Managed by improving liquidity reserves, optimizing asset-liability structure, and diversifying financing channels; during the reporting period, both the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) met regulatory standards[96](index=96&type=chunk) [Business Outlook](index=48&type=section&id=Operating%20Plan%20and%20Related%20Measures%20for%20the%20Next%20Reporting%20Period) For the next reporting period, the company plans to focus on developing light-asset businesses, enhancing core competitiveness, strengthening internal resource integration and synergy, and continuously optimizing development quality through improved risk management, fintech empowerment, and refined management - Key future operating plans include: - Vigorously developing light-asset businesses - Enhancing synergistic development capabilities and strengthening internal resource integration - Solidifying management foundations, including risk management, fintech empowerment, and refined management[102](index=102&type=chunk) [Section 4. Corporate Governance](index=49&type=section&id=Section%204.%20Corporate%20Governance) This section details the company's governance structure, compliance with regulations, and changes in its board, supervisory committee, and senior management [Overview of Corporate Governance](index=49&type=section&id=Corporate%20Governance%20Status) As an A+H listed company, the company strictly adheres to listing regulations, continuously improves its governance structure, complied with all provisions of the Corporate Governance Code, and held its 2020 Annual General Meeting to approve key resolutions - The company strictly complies with the laws and regulations of its listing venues, and during the reporting period, it adhered to all provisions of the Corporate Governance Code[103](index=103&type=chunk) - The 2020 Annual General Meeting was held on May 28, 2021, reviewing and approving **17** proposals, including the re-election of the Board of Directors[104](index=104&type=chunk)[105](index=105&type=chunk) [Changes in Directors, Supervisors, and Senior Management](index=52&type=section&id=Changes%20in%20the%20Company's%20Directors,%20Supervisors,%20and%20Senior%20Management) During the reporting period, the company completed the re-election of its Board of Directors and Supervisory Committee on May 28, 2021, with Mr. Chu Xiaoming re-elected as Chairman and Mr. Xu Yiyang elected as Chairman of the Supervisory Committee, alongside appointments and adjustments to senior management - The company completed the re-election of its Board of Directors on May 28, 2021, forming the Fifth Board of Directors with **11** members, and Mr. Chu Xiaoming was re-elected as Chairman[108](index=108&type=chunk)[109](index=109&type=chunk) - The company completed the re-election of its Supervisory Committee, forming the Fifth Supervisory Committee with **5** members, and Mr. Xu Yiyang was elected as Chairman of the Supervisory Committee[111](index=111&type=chunk)[112](index=112&type=chunk) - Changes occurred in senior management, with the appointment of a new Executive Committee and Mr. Xu Liang as Board Secretary[113](index=113&type=chunk)[114](index=114&type=chunk) [Employees and Remuneration Policy](index=57&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2021, the company had **11,591** employees and implements a market-oriented, performance-linked remuneration system, complemented by a tiered training system to support talent development aligned with its strategic goals - As of the end of the reporting period, the company had a total of **11,591** employees, with the vast majority being employees of Shenwan Hongyuan Securities[117](index=117&type=chunk) - The company implements a market-oriented remuneration policy, where compensation is directly linked to company, departmental, and individual performance[118](index=118&type=chunk) [Section 5. Environmental and Social Responsibility](index=59&type=section&id=Section%205.%20Environmental%20and%20Social%20Responsibility) This section outlines the company's commitment to environmental protection and social welfare through green finance initiatives, low-carbon operations, and targeted poverty alleviation efforts [Environmental Responsibility](index=59&type=section&id=Environmental%20Responsibility) The company actively supports national 'carbon peak and carbon neutrality' strategies by developing green finance, practicing low-carbon operations, and engaging in green research, including hosting a 'carbon neutrality' conference and publishing a white paper - The company vigorously develops green finance by underwriting green bonds, investing in environmental protection enterprises, and establishing 'carbon neutrality' funds[121](index=121&type=chunk) - The company was successfully selected as a Vice Chairman Unit of the China Green Carbon Foundation and established the industry's first 'carbon neutrality' sector team[122](index=122&type=chunk) [Social Responsibility](index=60&type=section&id=Social%20Responsibility) The company actively fulfills its social responsibilities by continuing targeted assistance to areas like Huining County in Gansu and Makit County in Xinjiang, investing **RMB 32.25 million** in H1 2021 for education, insurance, industry, ecological, and talent support projects - In H1 2021, the company cumulatively invested **RMB 32.25 million** in designated poverty alleviation areas[123](index=123&type=chunk) - Assistance measures include: - **Education Assistance**: Establishing 'Shenwan Hongyuan Classes' and subsidizing students from disadvantaged families - **Insurance Assistance**: Promoting 'Comprehensive Anti-Poverty Return Insurance' and 'Insurance + Futures' projects - **Industrial Assistance**: Investing **RMB 7 million** to support Huining's advantageous industries and leading enterprises - **Ecological Assistance**: Investing **RMB 5 million** to implement 'Carbon Sink Afforestation Projects' - **Talent Assistance**: Investing **RMB 14 million** to support the construction of Huining Cadre College[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) [Section 6. Significant Matters](index=64&type=section&id=Section%206.%20Significant%20Matters) This section covers key events including the change of accounting firms, ongoing litigation, significant related party transactions, and important matters concerning the company's subsidiaries [Change of Accounting Firm](index=64&type=section&id=Appointment%20and%20Dismissal%20of%20Accounting%20Firms) Due to KPMG Huazhen reaching its maximum continuous engagement period, the company changed its accounting firm for 2021, appointing PwC Zhongtian and PricewaterhouseCoopers as its domestic and international auditors, respectively, following board and shareholder approval - Due to reaching the maximum continuous engagement period, the company's 2021 auditors were changed from KPMG Huazhen to PwC Zhongtian (domestic) and PricewaterhouseCoopers (international)[134](index=134&type=chunk) [Litigation Matters](index=65&type=section&id=Litigation%20Matters) During the reporting period, the company had no major lawsuits or arbitrations, but its subsidiary Shenwan Hongyuan Securities was involved in multiple margin financing and stock pledge disputes ranging from tens of millions to hundreds of millions of yuan, with some cases in enforcement and others still pending - During the reporting period, Shenwan Hongyuan Securities had several new lawsuits, primarily involving margin financing and securities lending disputes and pledged securities repurchase contract disputes, such as the case against Liu Xiangdai (principal of **RMB 108 million**) and the case against Zhang Liuyang (principal of **RMB 85 million**)[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Progress was made in several legacy cases, such as the pledged securities repurchase dispute case against Shen Peijin and Zhu Lijing (principal of **RMB 695 million**), where the judgment has become effective and entered enforcement proceedings[143](index=143&type=chunk) [Significant Related Party Transactions](index=76&type=section&id=Significant%20Related%20Party%20Transactions) During the reporting period, the company engaged in routine related party transactions with affiliates, including securities financial services, product trading, leasing, and comprehensive services, all conducted within approved limits and at market-based prices, with no significant asset acquisitions or disposals - The company engaged in routine related party transactions, including securities brokerage, investment banking, and asset management, with China Jianyin Investment and its affiliates, Shanghai International Trust, and SAIC Group Finance Co., Ltd.[159](index=159&type=chunk)[160](index=160&type=chunk) - The company conducted securities and financial product transactions, such as repurchase transactions and bond trading, with related parties including Shanghai International Trust and Bank of Shanghai[165](index=165&type=chunk)[167](index=167&type=chunk) [Significant Matters of Company Subsidiaries](index=102&type=section&id=Significant%20Matters%20of%20Company%20Subsidiaries) During the reporting period, subsidiary Shenwan Hongyuan Securities issued multiple corporate, subordinated, and perpetual subordinated bonds, and received regulatory warning letters or rectification orders for internal control and employee conduct issues, which have since been rectified - Subsidiary Shenwan Hongyuan Securities issued multiple tranches of corporate bonds, subordinated bonds, and perpetual subordinated bonds to support its business development[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - During the reporting period, Shenwan Hongyuan Securities and its subsidiaries received warning letters or rectification orders from the Xinjiang, Chongqing, and Jiangsu CSRC bureaus due to issues such as employee conduct norms and inadequate internal controls[207](index=207&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) [Section 7. Share Changes and Shareholder Information](index=116&type=section&id=Section%207.%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's share capital structure and the holdings of its major shareholders, including changes due to securities lending activities [Share Changes](index=116&type=section&id=Share%20Changes) During the reporting period, the company's total share capital remained unchanged at **25,039,944,560** shares, with unrestricted shares accounting for **99.9983%** and restricted shares for **0.0017%** Share Structure | Share Type | Number of Shares | Percentage | | :--- | :--- | :--- | | Restricted Shares | 437,244 | 0.0017% | | Unrestricted Shares | 25,039,507,316 | 99.9983% | | **Total Share Capital** | **25,039,944,560** | **100.00%** | [Shareholder Information](index=118&type=section&id=Number%20of%20Shareholders%20and%20Shareholding%20Information) As of June 30, 2021, the company had **295,060** common shareholders, with China Jianyin Investment and Central Huijin Investment as the top two shareholders, holding **26.34%** and **20.05%** respectively, and some shareholder holdings changed due to securities lending activities Top Ten Common Shareholders' Shareholding Information (As of June 30, 2021) | Shareholder Name | Shareholder Nature | Shareholding Percentage (%) | Number of Shares | | :--- | :--- | :--- | :--- | | China Jianyin Investment Ltd. | State-owned Legal Person | 26.34 | 6,596,306,947 | | Central Huijin Investment Ltd. | State Share | 20.05 | 5,020,606,527 | | HKSCC Nominees Limited | Overseas Legal Person | 10.00 | 2,503,803,370 | | Shanghai Jiushi (Group) Co., Ltd. | State-owned Legal Person | 4.71 | 1,178,251,789 | | China Everbright Group Co., Ltd. | State-owned Legal Person | 3.99 | 999,000,000 | | Sichuan Development Holding Co., Ltd. | State-owned Legal Person | 3.54 | 886,043,633 | - Central Huijin Investment Ltd. holds **100%** equity in China Jianyin Investment Ltd. and is the company's ultimate controlling shareholder[216](index=216&type=chunk) [Section 8. Bond-Related Information](index=125&type=section&id=Section%208.%20Bond-Related%20Information) This section provides an overview of the company's outstanding bonds, their repayment status, and key debt-servicing capacity indicators [Corporate Bond Information](index=125&type=section&id=Corporate%20Bond%20Information) During the reporting period, the company had multiple outstanding public and non-public corporate bonds, successfully executed a put option and interest rate adjustment for '18 Shenhong 01' bond, with all bonds serviced on time and no defaults, and maintained AAA credit ratings with a stable outlook - The company exercised the investor put option for the '18 Shenhong 01' bond, with a put amount of **RMB 467 million**, and subsequently lowered the coupon rate to **3.20%**[240](index=240&type=chunk) - During the reporting period, the company's bond credit rating remained unchanged, with the main credit rating maintained at **AAA** and a stable outlook[241](index=241&type=chunk) [Key Debt-Servicing Capacity Indicators](index=132&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators%20for%20the%20Past%20Two%20Years) As of the end of the reporting period, the company's asset-liability ratio was **77.76%**, a slight increase from the prior year-end, and its interest coverage ratio decreased to **2.20** times, while loan repayment and interest payment rates remained at **100%** Key Financial Indicators | Item | Current Reporting Period | Prior Year Period | Change | | :--- | :--- | :--- | :--- | | Asset-Liability Ratio (%) | 77.76 | 77.08 (Prior Year-End) | Increase of 0.68 percentage points | | Interest Coverage Ratio | 2.20 | 2.36 | Decrease of 0.16 | | Loan Repayment Rate (%) | 100.00 | 100.00 | — | | Interest Payment Rate (%) | 100.00 | 100.00 | — | [Section 9. Financial Report](index=133&type=section&id=Section%209.%20Financial%20Report) This section presents the interim condensed consolidated financial statements, including the review report, and detailed notes on accounting policies, financial instruments, and segment reporting [Review Report and Financial Statements](index=133&type=section&id=Review%20Report%20and%20Financial%20Statements) This section includes the review report by PricewaterhouseCoopers and the unaudited interim condensed consolidated statements of profit or loss, comprehensive income, financial position, changes in equity, and cash flows, prepared in accordance with IFRS, with no matters found to suggest non-compliance - This interim condensed consolidated financial report is unaudited but has been reviewed by PricewaterhouseCoopers in accordance with International Standard on Review Engagements 2410[251](index=251&type=chunk)[485](index=485&type=chunk) [Notes to the Interim Condensed Consolidated Financial Report](index=143&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Report) The notes to the financial report provide detailed information on the company's background, accounting basis, significant accounting policies, and a breakdown of major consolidated statement items, including revenue composition, financial instrument details, segment reporting, related party transactions, fair value measurements, and financial instrument risk management - The notes provide detailed segment reporting information, classifying the company's businesses into four segments: Corporate Finance, Personal Finance, Institutional Services and Trading, and Investment Management, and presenting each segment's revenue, expenses, assets, and liabilities[401](index=401&type=chunk)[403](index=403&type=chunk) - The notes provide a three-level fair value hierarchy and detailed disclosures for financial instruments, and describe the company's management policies, methods, and sensitivity analysis for credit risk, liquidity risk, and market risk[407](index=407&type=chunk)[423](index=423&type=chunk)

申 萬 宏 源 集 團 股 份 有 限 公 司 SHENWAN HONGYUAN GROUP CO., LTD. (於中華人民共和國註冊成立的股份有限公司) 股份代號 : 6806.HK 000166.SZ 年度報告 重要提示 一、 本公司董事會、監事會及董事、監事、高級管理人員保證年度報告內容的真實、準確、完整，不存在虛假記 載、誤導性陳述或重大遺漏，並承擔個別和連帶的法律責任。 二、 本年度報告經公司第四屆董事會第六十次會議審議通過。會議應參加表決董事11人，實際參加表決董事11 人。沒有本公司董事、監事、高級管理人員聲明對年度報告內容的真實性、準確性、完整性無法保證或存在 異議。 三、 本公司按照國際財務報告準則編製的2020年度財務報告已經本公司核數師畢馬威會計師事務所審計，並出 具了標準無保留意見的審計報告。 四、 本公司法定代表人、總經理黃昊先生，財務總監任全勝女士及計劃財務部總經理張艷女士聲明：保證本年 度報告中財務報告的真實、準確、完整。 五、 經公司第四屆董事會第六十次會議審議通過，公司2020年度利潤分配預案如下： 1. 以公司截至2020年12月31日A股和H股總股本25,039,944 ...

Financial Performance - The company reported a total revenue of RMB 1.2 billion for the first half of 2020, representing a year-on-year increase of 15%[2]. - The net profit attributable to shareholders for the same period was RMB 300 million, up 20% compared to the previous year[2]. - User data indicated a growth in active accounts, reaching 5 million, which is a 25% increase from the previous year[2]. - Total revenue and other income for the first half of 2020 reached RMB 17,790,098,000, an increase of 18.30% compared to RMB 15,038,663,000 in the same period of 2019[14]. - Profit before tax for the same period was RMB 4,955,930,000, reflecting a growth of 23.81% from RMB 4,002,715,000 year-on-year[15]. - Net profit attributable to shareholders for the first half of 2020 was RMB 4,034,768,000, up 26.03% from RMB 3,201,521,000 in the previous year[15]. - Basic earnings per share increased to RMB 0.16, a rise of 14.29% from RMB 0.14 in the first half of 2019[16]. - Future guidance estimates a revenue growth of 10-15% for the full year 2020[2]. Business Strategy and Expansion - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by the end of 2021[2]. - New product launches are expected to contribute an additional RMB 500 million in revenue for the second half of 2020[2]. - The board of directors has approved a strategic acquisition plan to enhance service offerings, with a budget of RMB 200 million allocated for this purpose[2]. - The company operates in four main business segments: corporate finance, personal finance, institutional services and trading, and investment management[19]. Assets and Liabilities - Total assets as of June 30, 2020, amounted to RMB 441,633,887,000, representing a 13.67% increase from RMB 388,537,268,000 at the end of 2019[17]. - Total liabilities increased to RMB 355,333,613,000, a rise of 17.00% from RMB 303,705,861,000 at the end of 2019[17]. - The company's equity attributable to shareholders was RMB 84,633,596,000, showing a slight increase of 1.72% from RMB 83,206,190,000 at the end of 2019[17]. - The liquidity coverage ratio decreased to 208.09%, down 51.09 percentage points from 259.18% in the previous year[18]. Revenue Sources - Commission and fee income amounted to RMB 4,274 million, up RMB 193 million or 4.74% year-on-year, primarily due to growth in securities brokerage fees[56]. - Interest income reached RMB 5,667 million, an increase of RMB 348 million or 6.54% year-on-year, mainly from increased interest income on bond investments[56]. - Net investment income was RMB 3,289 million, up RMB 427 million or 14.92% year-on-year, driven by higher returns from bond investments[57]. - Other income and gains totaled RMB 4,560 million, a significant increase of RMB 1,783 million or 64.23% year-on-year, attributed to the growth in basis trade business[57]. Risk Management - The company has identified potential risks including market volatility and regulatory changes, which may impact future performance[8]. - The company has established a comprehensive risk management system and liquidity risk management mechanism to mitigate liquidity risks effectively[70]. - The company actively monitors macroeconomic conditions and regulatory policies to adjust risk control policies and business strategies accordingly[97]. - The company has a low tolerance for legal compliance risks and has strengthened compliance management and training[98]. Corporate Governance - The company will continue to improve its governance structure and comply with all relevant regulations to ensure sustainable development[109]. - The company has adopted a standard code for securities trading behavior for its directors and supervisors[109]. - The company has not encountered any non-operational fund occupation by controlling shareholders or related parties during the reporting period[112]. Social Responsibility and Community Engagement - The company invested a total of RMB 36.1354 million in poverty alleviation efforts, including RMB 33.8394 million from its own funds, RMB 2.04 million from party fees, and RMB 0.176 million from employee donations[172]. - The company supported the construction of water safety facilities in 26 towns, benefiting 3,111 households and nearly 14,000 impoverished individuals, with an investment of RMB 10.17 million[173]. - The company has conducted approximately 4,000 video conferences in 2019, significantly reducing the need for in-person meetings and associated carbon emissions[167]. - The company donated RMB 10 million to Hubei Charity Federation on January 26, 2020, as part of its support for the COVID-19 pandemic response, with subsidiaries contributing an additional RMB 1 million each[186]. Legal Matters - Shenwan Hongyuan Securities engaged in a stock pledge repurchase dispute involving a total of 12 million shares of "Modern Avenue" (stock code: 002656) and a loan amount of RMB 99 million[115]. - The company is involved in a historical case regarding a contract dispute with Shanghai Zhuxin Industrial Co., which involves a claim for the delivery of 30,000 tons of coke and associated liabilities[118]. - The company has initiated enforcement actions to recover amounts owed from the pledged shares of Oriental Network[125]. - The ongoing legal proceedings may impact the company's financial position depending on the outcome of the case[127].

Dividend Distribution - The company plans to distribute a cash dividend of RMB 0.80 per 10 shares, totaling RMB 2,003,195,564.80, based on a total share capital of 25,039,944,560 shares as of December 31, 2019[2]. - The company's retained earnings after the dividend distribution will be RMB 1,217,347,642.66, which will be carried forward to the next fiscal year[2]. - The cash dividend for 2017 was also RMB 1,126,797,228.00, representing 24.50% of the net profit of RMB 4,599,683,411.82[139]. - The cash dividend for 2018 was RMB 1,126,797,228.00, which accounted for 27.09% of the net profit of RMB 4,160,188,689.17[139]. - The net profit attributable to shareholders for 2019 is RMB 5,735,412,391.33, with the cash dividend representing 34.93% of this profit[139]. - The company will withhold a 20% personal income tax on dividends paid to mainland individual investors through the Shenzhen-Hong Kong Stock Connect[143]. - The company has implemented a unified withholding tax rate of 10% for dividends distributed to overseas H-share non-resident shareholders[143]. - The company has confirmed that the cash dividend distribution will occur within two months after the shareholders' meeting, expected no later than August 31, 2020[145]. - The company has a cash dividend policy that requires at least 30% of the average distributable profit over three consecutive years to be distributed in cash[135]. - The company maintains a continuous and stable profit distribution policy, prioritizing cash dividends when there are no major investment plans[135]. Financial Performance - Total revenue and other income for 2019 reached RMB 33,251,541,000, representing a 37.92% increase from RMB 24,109,617,000 in 2018[26]. - Profit before tax for 2019 was RMB 6,927,231,000, up 33.54% from RMB 5,187,265,000 in 2018[26]. - Net profit attributable to shareholders for 2019 was RMB 5,735,413,000, a 37.86% increase compared to RMB 4,160,189,000 in 2018[26]. - Basic earnings per share for 2019 were RMB 0.24, an increase of 26.32% from RMB 0.19 in 2018[26]. - The weighted average return on net assets for 2019 was 7.41%, up from 6.19% in 2018, reflecting an increase of 1.22 percentage points[26]. - The company's operational cash flow showed improvement, with a net cash outflow of RMB -1,004,066,000 in 2019, compared to RMB -9,396,995,000 in 2018[26]. - Total assets increased by 11.74% to RMB 388.54 billion at the end of 2019 compared to RMB 347.73 billion at the end of 2018[27]. - The company's total liabilities increased by 9.83% to RMB 303.71 billion at the end of 2019 compared to RMB 276.53 billion at the end of 2018[27]. - The company's total equity attributable to shareholders was RMB 83,206 million, representing a 19.89% increase year-on-year[75]. Corporate Governance - The financial report for 2019 has been audited by KPMG, which issued a standard unqualified opinion[2]. - The board of directors and senior management confirm the accuracy and completeness of the annual report, with no dissenting opinions from the board members[2]. - The company emphasizes that forward-looking statements regarding future plans and strategies do not constitute a commitment to investors, highlighting the importance of investment risk awareness[2]. - The company has complied with all provisions of the Corporate Governance Code as per the Hong Kong Listing Rules[131]. - The company has established appropriate insurance arrangements for its directors and senior management against legal liabilities arising from corporate activities[127]. Risk Management - The company has established a comprehensive risk management system to effectively control market, credit, liquidity, and operational risks, ensuring healthy business development[43]. - The company emphasizes comprehensive risk management, building a multi-level risk management organizational structure[123]. - The company has implemented a unified internal evaluation system covering all subsidiaries to enhance credit risk management[110]. - The company has established a multi-level risk control indicator system to manage market risk, including risk tolerance and loss limits[107]. - The company is facing significant market risk challenges due to uncertainties in the domestic and international economic environment and the impact of the COVID-19 pandemic[108]. Business Operations - The company operates through three subsidiaries providing securities services: Shenwan Hongyuan Securities, Shenwan Hongyuan West, and Shenwan Hongyuan Underwriting[16]. - The company operates in four main business segments: corporate finance, personal finance, institutional services and trading, and investment management[32]. - The company's investment management business includes asset management, public fund management, and private fund management services, with no significant changes in the main business model during the reporting period[37]. - The company is actively exploring international business opportunities, leveraging the "Belt and Road" initiative to enhance its investment capabilities[40]. - The company has established qualifications for participating in the interbank bond market, enhancing its trading capabilities[18]. Legal Matters - The company faced a lawsuit from Shanghai Metallurgical Company, claiming RMB 7,182,778.4 in principal and additional interest, totaling approximately RMB 36.2 million[171]. - The company is involved in a contract dispute with Shanghai Zhuxin Industrial Co., requiring the delivery of 30,000 tons of coke, with a first-instance judgment ordering compliance[173]. - The company has initiated legal action against Dalian Detai Holdings for failure to provide suitable relocation housing, seeking a property of 5,000 square meters[174]. - The company is involved in a legal dispute with Dalian Detai regarding a compensation agreement, with a potential economic loss compensation of RMB 53.4659 million and a penalty of RMB 26,732.95[175]. - The company has a pending arbitration case against Cai Xiaoru, with a principal amount of RMB 75.7 million and additional claims for interest and legal fees totaling RMB 490,000[176]. Shareholder Commitments - The company's major shareholder, China Jianyin Investment, holds 60.02% of Hongyuan Securities and has made commitments to avoid unfair transactions and protect minority shareholders' interests[152]. - The commitments include ensuring fair pricing in related transactions and adhering to legal disclosure obligations[153]. - The company is currently fulfilling its commitments regarding the management of related transactions and shareholder rights[154]. - The commitments made by the board and senior management are aimed at ensuring compliance with regulatory requirements and protecting company interests[150]. - The company has pledged to participate in shareholder meetings and exercise rights without seeking undue advantages[154]. Financial Qualifications - The company holds various qualifications including securities brokerage, investment consulting, and asset management, enhancing its operational capabilities in the financial market[17]. - Shenwan Hongyuan has qualifications for trading in multiple financial instruments, including stock options and bonds, which positions it well for market expansion[18]. - The company has qualifications for various derivative products, including credit derivatives and interest rate swaps, which diversify its service offerings[19]. - The company has established qualifications for managing insurance funds, indicating its involvement in the insurance investment sector[19]. - The company has a comprehensive range of qualifications that support its strategic initiatives in market expansion and product development[17].